Conestoga Wood Specialties Corporation v. Sebelius

This week, the U.S. Supreme Court heard oral argument in two cases brought by for-profit corporations challenging the Affordable Care Act’s (ACA) birth control benefit, which requires that health plans include coverage for contraception—a basic health service that 99 percent of women use at some point in their lives. Hobby Lobby, a national chain of arts and crafts stores, and Conestoga Wood Specialties, a furniture manufacturer, argue the ACA’s requirement that health plans cover contraception violates their religious liberty rights by forcing them to participate in a process that ends with women accessing and using birth control.

Hobby Lobby and Conestoga Wood Specialties are pursuing a radical proposition: that corporations have a right to impose religious beliefs on their employees by withholding benefits otherwise legally guaranteed to the women who work there. As others have noted, a win for the companies in these cases could open the door to all sorts of claims that corporations can opt out of laws that have helped shape our society and matter deeply to Americans, from Social Security to labor and civil rights laws. We have already seen a preview of what this could mean for the rights of LGBT individuals and families in the Arizona bill vetoed by Gov. Brewer last month.

It is important to note that, in the past, courts have rejected claims that religion-based arguments could allow restaurants to discriminate on the basis of race, or businesses to ignore wage-and-hour laws, for example. But several lower courts have ruled in favor of corporations in the birth control cases, and several justices seemed to favor their position this week.

Yesterday the Supreme Court heard arguments in the long awaited cases of for-profit corporations arguing that Obamacare's contraception mandate endangers their constitutional and statutory religious exercise rights. Both Hobby Lobby Stores Inc., a national arts and crafts store chain, and Conestoga Wood Specialties Corp., a small kitchen cabinet maker, argued that they should be exempt from the health insurance regulations due to not just their owners’ beliefs, but their corporate consciences. Rather than focus on whether a company is a "person" that "has" a statutory or constitutional right to free exercise of religion, the Justices could have pushed harder on a constitutional question that comes first: whether the lawsuit even belongs in a federal court.

During the arguments, Justice Elena Kagan noted: “I'm not sure I understand it as a threshold claim that . . . the claim is not recognizable at all.” And Justice Anthony Kennedy asked: “You say profit corporations just don't have any standing to vindicate the religious rights of their shareholders and owners.” Does Hobby Lobby have standing to sue? For a federal judge to hear a case, Article III of the Constitution requires there to be a “Case or Controversy.” The Supreme Court has interpreted the requirement to mean that a plaintiff must suffer a "concrete injury" to its own interests – and not those of others – in order to sue. The Court has kicked out cases holding that a "mere interest in a problem" was not concrete enough. The Court has only in unusual cases allowed a third-party to sue on behalf of another, like an employee, owner, or customer.

These companies say that they suffer direct harm: the contraception mandate costs them money. That is what the Tenth Circuit in Hobby Lobby briefly noted: the companies “face an imminent loss of money, traceable to the contraceptive-coverage requirement.” But even if that is true (which was the subject of tough questions at the arguments), paying that money does not directly affect any individual’s ability to freely exercise religion. Only the employees and officers can directly exercise their individual religious beliefs. And they are not the ones paying to comply with the regulations. They are separate from the company.

This morning, I attended the Supreme Court oral argument in Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties Corp. v. Sebelius. In these two consolidated cases, the for-profit corporations Hobby Lobby and Conestoga Wood claim that they have a right to a religious exemption from federal regulations that require health-insurance plans to include coverage for contraceptives.

The corporations’ principal claim is based on the Religious Freedom Restoration Act of 1993 (“RFRA”), which generally provides that the federal government cannot substantially burden a person’s religious exercise unless it has a compelling interest in doing so. RFRA passed the House of Representatives unanimously and the Senate by a vote of 97 to 3.

As Justice Ginsburg suggested at today’s argument, it is inconceivable that RFRA would have received such broad support, let alone passed at all, if the members of Congress who voted for it had had any inkling of how opponents of the contraceptive-coverage regulations would attempt to use RFRA today. Represented by former Bush administration Solicitor General Paul Clement, Hobby Lobby and Conestoga Wood have given RFRA such a broad interpretation that it would give religious entities carte blanche to override individual rights not just in the contraceptive-coverage arena, but in a virtually unlimited array of contexts.

Clement’s case begins with the proposition that for-profit corporations can somehow exercise religion and therefore be entitled to RFRA’s protections. Justice Sotomayor asked how does a for-profit corporation exercise religion, who in the corporation decides what the corporation’s “religious beliefs” are, and how much of the corporation’s activities must be religious for RFRA to apply. Justice Scalia subsequently indicated that it would be sufficient if those who control the corporation merely assert what the corporation’s “religious beliefs” are for such “beliefs” to be protected under RFRA.

* The views expressed in this post are the author’s own, and do not reflect those of any institution with which he is affiliated or employed.

As the Supreme Court heard oral arguments today in the “contraceptive mandate” cases, one question that everyone is grappling with has to do with the ramifications of the decision. These cases concern whether the Religious Freedom Restoration Act (RFRA), which prohibits federal law from imposing a substantial burden on a person’s exercise of religion, excuses for-profit corporations from providing access to contraceptive coverage to their employees. For the Court to rule in favor of the corporations, it must hold that (1) a corporation has free exercise rights under the statute, (2) that the burden the mandate imposes is substantial and (3) the interests the mandate serves are not compelling. Ruling in favor of the plaintiffs on any of these grounds will have substantial effects for doctrine across the board.

However, one possible result that has received less (if any) attention is the effect that the Court’s holding will have on state laws relating to numerous areas including antidiscrimination, insurance coverage, land use and corporations law. There is good reason for this oversight. In Boerne v. Flores, the Supreme Court held that RFRA could not limit state law—so the Court’s holding as to the reach of RFRA will not inhibit the reach of state law. And because this is a statutory holding, and the Court shows no immediate signs of re-incorporating the RFRA test into constitutional doctrine, the effects on First Amendment doctrine (which does limit state law) will be limited.

But there is, nonetheless, a good chance that a loss for the government will affect state regulation. First, in the area of land use, the Religious Land Use and Institutionalized Persons Act (RLUIPA), unlike RFRA, has does (as of now, at least) apply to localities. While there may be textual reasons why RLUIPA could be read differently that do not bear deep excavation, the bottom line is that RLUIPA was basically modeled after RFRA. If corporations can invoke RFRA to escape federal regulation, they may well be able to invoke RLUIPA to escape basic zoning regulation, from which, so far, only churches and religious institutions have so far been exempt.

The friend-of-the-court brief authored by Dawn Johnsen, a distinguished professor at the Indiana University Maurer School of Law (and a member of the ACS Board), and includes former U.S. Solicitor General Walter Dellinger as Counsel of Record explains that the for-profit companies – an arts-and-crafts chain store and a cabinet manufacturer – have “failed to recognize the vastly different effectiveness and cost of different forms of contraception, the substantial degree to which cost determines which contraceptive methods are actually used, the health and social factors that affect a woman’s method of choice, and the resulting consequences for women’s health, family and well-being, and risk of unintended pregnancy and abortion.”

In the brief, Johnsen and Dellinger note that cost-sharing promoted by the Affordable Care Act is critical to allowing every woman to have access to the most effective forms of contraception available. It is claimed that hormonal intrauterine devices (IUD) are “45 times more effective than oral contraceptives and 90 times more effective than male condoms in preventing pregnancy based on typical use” and that “[a]lmost one-third of American women report that they would change their contraceptive method if cost were not an issue.” However, the cost of IUDs is an overwhelming issue for many Americans as implantation can cost “a month’s salary for a woman working full time at minimum wage.”

To rule in favor of the corporations in these cases “would deny to female employees and their insured family members vital access to the full range of contraceptive methods, inflicting financial harm and erecting obstacles to needed medical care.”